We anticipate the market, based on pre-market movements, to be more stable than yesterday. The Nasdaq continues to hold up rather well and is taking out its previous high; the Dow Industrial and S&P500 are holding below 10% from their previously highs. We will be watching the Overall/Nasdaq Trade Balance to see if blue (buying) can return into the DA, DB, DC rooms which are currently red. If buying returns to the Dow/S&P, we anticipate yesterday's weakness could end up being a one day pullback... that is, so long as NY Crude stays above $78.68 the rest of this week. (
see yesterday comments)
Here is today's live class outlines with pre-market observations and comments... will update live when your live class begins at 10AM....
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Here is an example of rotation that we talk about in our live class and training webinars. Many energy related stocks have performed very well for 2 to 3 weeks. This week we are picking up some rotation out of energy into something else. While we are not currently picking up extreme rotation that would suggest a deeper pullback is ongoing, we are picking up enough rotation to suggest the current longer-term energy sector uptrends are stalled out for, in all probability, another day or two, or until next week. I have a few positions in energy that I am comfortable with riding these PB related trades, but what my real goal would be is to finally identify some top-quality, lower-risk buy setups in preferably a SC or SD swing room to consider as early as Friday, or hopefully something by mid next week. That is the goal or strategy for now. Depending on what happens now determines how or if we follow-through with this idea. All my work suggests the highs in energy stocks are not here yet, so I still have a good interest and catching more of this uptrend as long as low-risk opportunity still seems available. Anyways, the primary purpose of this exercise is to show you a real-time example of rotation. I will try to follow-up later on this example to see if anything can be identified in the near-term.
Like many people who have been trading the Basic Materials Sector, specifically the Metal Mining group, we have done really well trading the past month. Monday and Tuesday, however, has been a little bit of a temporary reversal or pullback mode in many of the leading, most popular high-flying stocks. DT has picked up minor rotation out of this group for a couple days now. Some of the stocks we really have liked are showing a little bit of red in their day-trade rooms, but overall we believe the previous strong uptrend can return. Like most we still believe the Metal Mining group still has some potential and has not topped out yet longer-term. Because so far this rotation, or selling, has been very organized and controlled, we believe within a couple more days, or before the end of next week it would not surprise us if this group attempts to return its previous very strong uptrend. This post is just an example of the rotation we talk a lot about in our live class, and currently is an example of something we still have interest in buying into a good quality buy setup in an upper swing trade room preferably. I have been out of RTP, for example for a couple days now but plan to return if at all possible in the next couple weeks for one more attempt to catch this strong trade.
Most people recognize precious and industrial metals have been doing very well in the futures and stock markets, but did you know there has been some profit-taking going on in, for example, in the Gold and Silver group? It started to show up last Wednesday in a minor way but then Gold/Silver stabilized until Friday where more profit-taking filtered back in. This coincides with rotation out of energy and other mining groups this week.
We believe the trend up is not over in this group either. Because of the uniformity and controlled nature in this rotation, we believe this is just a short-term money management issue, not a fundamental or major technical reason for money flowing temporarily out of gold and silver mining companies. Therefore, we remain attracted to this group and hope we can identify an upper swing trade room top-quality buy setup(s) within the next couple weeks.